Tuesday, April 21, 2009
Intelligent research is the first step to launching (or not launching) any new business venture. Thinking like the individuals you are most hoping to influence is the key to developing a successful business model.
I’ve saved clients millions of dollars over the years by identifying critical threats (competitive, legal, moral, etc.) to their proposed new venture, simply by putting myself in the shoes of their target audience, and behaving as they would when presented with the new option being offered. In some cases, I’ve identified far better business models to pursue and directed my clients accordingly. But in many case, I’ve advised existing or prospective clients not to pursue the new venture at all, for reasons discovered through my intensive due diligence process.
Around Y2K, a top cruise industry executive asked my opinion regarding how I might rebrand their primary cruise line to better articulate their marketing message. The first thing I did was search the web to see how all other brands were attempting to sell me on the idea of a cruise, and how they claimed to be different from every other option available of the eighteen or so to select from. I quickly discovered that virtually every brand was claiming to be just perfect for me, without knowing anything about me or other people like me.
Every brand was speaking to me from their own perspective (selling me on their brand), while my own personal concerns centered around whether I would even enjoy cruising at all, regardless of brand. I decided that I might be compelled to cruise if it were with a ship full of other people like me, who I might most enjoy partying with for a week. I also quickly noticed that no cruise line gave me the option to search for cruises based on the types of people I might like to cruise with enough to tip me off the fence to pull the trigger and actually book a cruise.
While every brand in the industry was touting their destinations, size of ship, amenities, service, price, etc., the one thing I was most interested in - cruising with a bunch of other people that I would actually enjoy spending a week with - was not a searchable option. When every brand in an industry tells you they are just perfect for everyone, the entire industry is actually telling you that they don’t know you or care about your wants and desires.
So there it was – the reason why more people weren’t cruising was staring me right in the face, and the ramifications of this revelation were not only significant for the single brand for whom I was consulting, but for the entire cruise industry. An industry that was accustom to broadcasting their marketing message in one direction was about to be confronted with a new paradigm, the requirement for a cultural shift toward two-way dialogue as a marketing necessity.
Under my guidance, the results of these early revelations led to a cultural transformation not only at this Fortune 500 cruise line, but across the entire industry as their competitors responded to our online initiatives. Consumers had found their voice through online social media, and began configuring their own cruises not around brands or itineraries per se, but around groups formed online by others like themselves. We eavesdropped on their conversations as the groups were forming online, anticipated their wants and desires, and delighted them once on board, by honoring their group with a party and memorializing their time together in pictures.
My theory went as follows: Once groups form, and vacations are enjoyed, they plan another cruise, together, with even more of their friends. As the trend develops over the years, groups will double in size each year, and eventually grow large enough to charter entire ships (saving the cruise line 15% on travel agent fees and 100% on marketing costs), and they won’t even care what brand name is on their ship.
As group leaders emerge and find their voice, they may select a different ship or different itinerary for the group’s next cruise, but it was highly unlikely they would opt to switch brands – as such a move is too disruptive to the group. Brand loyalty is a happy byproduct in this case - not as a result of the superior service delivered, but because the switching cost (disruption and angst within the group) is simply too high. As “the group becomes the brand,” the industry can spend less on brand marketing (reduce or eliminate television advertising), and more on delivering the experience at a better value to these devoted groups.
The world of information is at your fingertips, provided you bother to commit the time and effort, and ask the right questions. Before I embark on any new concept, whether for myself or my clients, I've been known to spend several days with as many as 15 Google tabs open at one time, in search of total information awareness on all aspects related to the target concept. Every Google search can open a door to new elements that may not previously have occurred to you, many of which are critical to understanding whether your new venture is actually going to be perceived by the market in the way that you think it will be.
Unless and until you are willing to step out of your own shoes and into those of the people you are most trying to influence (at every level of the value chain), you can’t really know whether your product/service, messaging, price point, delivery method, etc. is truly going to result in the only thing that matters, profit.
New Venture Strategies is a Fort Lauderdale based consultancy focused on helping entrepreneurs and executives ensure the success of any new venture or initiative. Headed by longtime social networking guru, Tom Martin, areas of expertise include: in-depth research, strategic business planning, segmentation and targeting, social media and networking, public relations, e-marketing, media production and product launch.